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SIGNATURE LESLIE L. OGG
TITLE GENERAL COUNSEL
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Independent Auditors' Report on Internal Accounting Control
The Board of Directors and Shareholders
AXP High Yield Tax-Exempt Fund, Inc.:
In planning and performing our audit of the financial statements of AXP
High Yield Tax-Exempt Fund, Inc. For the year ended November 30, 1999,
we considered its internal control, including control activities for
safeguarding securities, in order to determine our auditing procedures
for the purpose of expressing our opinion on the financial statements and
to comply with the requirements of Form N-SAR, not to provide
assurance on the internal control.
The management of AXP High Yield Tax-Exempt Fund, Inc. is responsible
for establishing and maintaining of internal control. In fulfilling this
responsibility, estimates and judgments by management are required to
assess the expected benefits and related costs of controls. Generally,
controls that are relevant to an audit pertain to the entity's objective
of preparing financial statements for external purposes that are
fairly presented in conformity with generally accepted accounting principles.
Those controls include the safeguarding of assets against
unauthorized acquisition, use or disposition.
Because of inherent limitations in internal control, errors or irregularities
may occur and not be detected. Also, projection of any
evaluation of internal control to future periods is subject to the
risk that it may become inadequate because of changes in conditions or that
the effectiveness of the design and operation may deteriorate.
Our consideration of the internal control would not necessarily disclose
all matters in the internal control that might be material weaknesses
under standards established by the American Institute of Certified
Public Accountants. A material weakness is a condition in which the design
or operation of one or more of the internal control components does not
reduce to a relatively low level the risk that errors or
irregularities in amounts that would be material in relation to the
financial statements being audited may occur and not be detected within a
timely period by employees in the normal course of performing their
assigned functions. However, we noted no matters involving the internal
control and its operation, including controls for safeguarding securities,
that we consider to be a material weakness as defined above.
This report is intended solely for the information and use of management,
the Board of Directors of AXP High Yield Tax-Exempt Fund, Inc., and
the Securities and Exchange Commission and is not intended to be and
should not be used by anyone other than these specified parties.
KPMG LLP
Minneapolis, Minnesota
January 7, 2000
#113651 v01
EXHIBIT 77D
For AXP High Yield Tax-Exempt Fund
The following investment policy was eliminated for the fiscal year ending
November 30, 1999:
Under normal market conditions, the Fund does not intend to commit more
than 5% of its total assets to when-issued securities and forward commitments.
